The Research Of Commercial Bank's Performance Evaluation Based On The Balanced Score Card

The performance evaluation of commercial banks is a core component of commercial bank's internal control systems. It benefits both commercial bank managers and staff by Indicating the direction of business management as well as establishing necessary conditions for incentive mechanisms. The study of performance evaluation system of commercial banks has not only the important significance of improving business performance and core competencies but also a practical significance of optimizing the allocation of financial resources and promoting sustained and healthy development of commercial banks as a comprehensive response to the fierce competition of foreign banks.This thesis closely focus on the theme of performance evaluation of commercial banks, which first introduces the development of performance evaluation in domestic and foreign commercial banks, elaborates the basic theory of performance evaluation of commercial banks, then describes the situation of the performance evaluation and analyzed the existing problems of the performance evaluation system. On this basis, the Balanced Scorecard (abbreviation BSC), the internationally popular tool of performance evaluation is introduced. First of all, the development history, the basic framework and main content of Balanced Scorecard are introduced. Next the thesis illustrates the advantages of Balanced Scorecard which is applied to the performance evaluation of commercial banks. Finally, the thesis uses a case study to illustrate how to develop a strategy maps, design balanced scorecard indicator system and program of the implementation of balanced scorecard in order to put the balanced scorecard into specific actions of each employee. The thesis includes five parts as follows:The first part is an introduction, mainly describing the background and significance of this study, reviewing the development of performance evaluation in domestic and foreign commercial banks, research ideas, methods and innovation. The second part is an overview of the basic theory of performance evaluation about commercial banks. Firstly, the thesis introduces the meaning, objectives and role theories of the performance evaluation, objectives and role theories, also describes the situation of the performance evaluation and analyzes the existing problems of the performance evaluation system in commercial banks.The third part is the part of the basic theory of the balanced scorecard. First, a brief review of the history of the balanced scorecard introduces, also the thesis demonstrates the core concepts of the balanced scorecard and the basic framework, which is strategy development, indicators design of balanced scorecard, implementation plans of balanced scorecard, performance feedback and learning systems. In relation to commercial banks the content of balanced scorecard is introduced, including financial dimension, customer, internal business processes and learning and growth of employee. The thesis also analyzes the causal relationship between them. Finally, the thesis illustrates the advantages of the balanced scorecard which is applied to commercial banks.The fourth part is about a performance evaluation of the Balanced Scorecard. First analyze existing problems of applying balanced scorecard in Commercial Bank and propose the five principles which the application of the Balanced Scorecard must adhere to. Guided by these principles, the thesis has S bank as a case to illustrate how to determine strategy and develop a strategy map as well as divide Balanced Scorecard strategy into four dimensions of the performance evaluation system. Then explain how to implement business restructuring, budget and operational plans, human resources systems and organization and coordination into the Balanced Scorecard performance evaluation system in order to put the balanced scorecard into specific actions of each employee. Finally, demonstrate how to make performance evaluation system into the continuous process through a feedback system of Balanced Scorecard.The fifth part is a conclusion. Based on the case of S bank, the thesis presents a summary of the problems which the implementation of the Balanced Scorecard commercial banks should pay attention to. At the same time, the thesis points out the key elements of successful implementation of the Balanced Scorecard and the necessary preparations.The innovations of this thesis are as follows:1. Analyze the problems of performance evaluation of commercial banks, put forward a balanced scorecard performance evaluation system as well as build the idea of a strategy-oriented performance evaluation system of commercial banks.2. Using specific case studies to illustrate how to put performance evaluation system of the Balanced Scorecard into action of each employee so that the Balanced Scorecard becomes more practical and operational.